Party chief embroiled in huge corruption scandal

BEIJING - In the latest sign of China's power base becoming more entrenched in Beijing, a corruption investigation in Shanghai has been widened to include the country's former top statistician and the general manager of the city's new Formula One Grand Prix circuit.

The financial scandal is the biggest to strike the city since the onset of economic reforms and political openness in the 1980s.

Around 10 top city officials and businessmen have been weeded out in the probe with the biggest scalp Chen Liangyu, the most senior Communist Party official in Shanghai and a member of the powerful Politburo.

Chen's political ally Yu Zhifei, general manager of Shanghai International Circuit, is said to be "assisting investigations" into a scandal involving one third of a £670 million ($1.8 billion) pension fund to make illegal loans and investments in real estate and other deals.

The Shanghai Government pumped £128 million into building the Chinese Grand Prix circuit around one hour from the city, to give Shanghai a global profile and boost its image.

A flamboyant figure who started out as a factory boss but worked his way up to the head of the Shanghai Shenhua soccer club, Yu is a familiar figure on the city's social circuit. He brought Manchester United to Shanghai to play against his club.

Meanwhile, Qiu Xiaohua, the former head of China's National Bureau of Statistics (NBS) was also under investigation, a few days after he was mysteriously removed from office.

"Relevant departments, when carrying out investigations into the Shanghai social security fund scandal, found out that Qiu was suspected of being involved in severe violations of party discipline," said National Bureau of Statistics spokesman Li Xiaochao.

"The central disciplinary office is now conducting an investigation into his involvement," he added

The probe is happening because President Hu Jintao wants to consolidate his position at the helm of the Communist Party and be rid of supporters of his predecessor, Jiang Zemin.

- INDEPENDENT